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Iran,
Iraq Ink MoU on Transportation
 TEHRAN (Dispatches) - Iran and Iraq have signed a memorandum
of understanding (MoU) to increase cooperation in road,
railway and air transportations as well as technical and
engineering fields.
The MoU was signed by Iran's Minister of Roads and Urban
Development Ali Nikzad and Iraq's Minister of Transportation
Hadi al-Amiri on Wednesday.
Under the MoU, Iran and Iraq agreed to facilitate bus travel
and launch more direct flights between the two countries.
They also agreed to connect the two countries' railways
through Khosravi and Shalamcheh border lines.
Nikzad also said Iran is ready to cooperate with Iraq in
housing projects.
Amiri hailed Iraq's trade and economic cooperation with Iran
and called for the exchange of experience and expertise
between the two neighbors.
Meanwhile, Azzaman.com reported from Iraq the same day that
the annual trade between the Islamic Republic of Iran and
Iraq exceeded $10 billion in 2011.
"Iraq and Iran are working hard to increase the flow of
trade between the countries despite attempts by the U.S. and
allies to tighten their sanctions on Tehran," the report
read.
According to the report the bilateral trade exceeded $10
billion in 2011 with Iran emerging as Iraq’s number one
trade partner.
The economies of the two countries have never been so
integrated with Iraq relying on Tehran for electricity,
fuel, food stuffs and industrial goods, the report added.
In related news, Iranian First Vice-President Mohammad Reza
Rahimi welcomed the bilateral agreements signed between
Tehran and Baghdad during Amiri's current visit to Iran, and
said the two countries should further expand their railway
ties and cooperation.
The Iranian official referred to the existence of great
potentials in both countries and good geographical positions
of them, arguing, "The Islamic Republic of Iran and the
Republic of Iraq can by activating their potentials and
broadening the level of cooperation achieve shared
interests.
Rahimi meanwhile emphasized on need for establishment of
strong and reliable railway links between the two countries,
adding, "Taking advantage of railroad in transportation has
numerous privileges, including economizing in time, high
security index, and abundant income."
Referring to the reached agreements in transportation field,
Rahimi asked for expansion of railway cooperation and
acceleration of new railways construction, increasing the
two countries' ports and port facilities, and increasing the
direct flights between Iran and Iraq.
Iran and Iraq have enjoyed growing ties ever since the
overthrow of the former Iraqi dictator, Saddam Hussein, in
2003.
Both sides are working on a series of plans to take wide
strides in expanding their ties.
Early in July, Iran and Iraq agreed to boost the value of
their trade exchanges to $20b in the near future.
Iran's Minister of Roads and Urban Development Ali Nikzad
(L) and Iraq's Minister of Transportation Hadi al-Amiri
shake hands after signing an MoU on transportation
Despite Sanctions, Iran Foreign
Trade Rises
 TEHRAN (Press TV) - Figures released by Iranian officials
show the country's foreign trade has been developing in
recent years despite tougher sanctions imposed on Iran's oil
and financial sectors by the US and European Union.
Iran's Ambassador to Beijing Mehdi Safari said Wednesday
that trade between Iran and China increased by 55 percent to
exceed $45 billion in 2011.
He added that the annual trade figures show a 16
billion-dollar increase in commercial ties with China since
2010.
China is Iran's top trade partner, with economic ties
expanding in recent years after the withdrawal of Western
companies in line with sanctions against the Islamic
Republic over its peaceful nuclear program.
Beijing has also significantly increased its presence in
Iran's oil and gas sector by signing a series of contracts
worth up to $40 billion in the past few years.
Chinese Prime Minister Wen Jiabao defended his country's oil
trade with Iran in defiance of proposed US and European
sanctions during the last leg of his recent Persian Gulf
tour on January 19.
"I believe that China is not the only country to buy oil
from Iran... Legitimate trade has to be protected if global
economic chaos is to be avoided," Wen told reporters in the
Qatari capital city of Doha.
Iran is the third largest provider of oil to China which
accounts for 11 percent of the country's oil imports.
India and South Korea are also major importers of Iran's
crude oil which have rejected frequent calls by US and EU to
join West's oil embargo against Tehran.
On December 31, 2011, US President Barack Obama signed into
law new sanctions which seek to penalize countries importing
Iran's oil or doing transaction with the country's central
bank.
In their latest meeting in Brussels on January 23, EU
foreign ministers also imposed new sanctions on Iran which
include a ban on purchasing oil from the country, a freeze
on the assets of Iran's Central Bank within the EU, and a
ban on the sale of diamonds, gold and other precious metals
to Iran.
EU foreign policy chief Catherine Ashton claimed that the
new sanctions aim to bring Iran back to negotiations with
P5+1 -- US, UK, France, Russia, China and Germany -- over
the country's peaceful nuclear program.
The United States, Israel and some of their allies accuse
Tehran of pursuing military objectives in its nuclear
program and have used this pretext to impose four rounds of
sanctions and a series of unilateral sanctions against the
Islamic Republic.
Iran has refuted the allegations, arguing that as a
signatory to the Nuclear Non-Proliferation Treaty and a
member of the International Atomic Energy Agency, Tehran has
a right to use nuclear technology for peaceful use.
Iran's foreign trade has been steadily increasing despite
tougher sanctions by US and EU
After Sanctioning Iran…
IMF Warns About Soaring Hike in Oil Price
TEHRAN (FNA) - Oil prices, which reached a new record this
week, will keep rising if the oil sanctions against Iran
will be implemented, the International Monetary Fund (IMF)
warned.
The IMF said that sanctions imposed by the US and European
Union on Iran's oil and financial sectors will cause the
global oil price to rise by 20-30 percent.
A paper published by the world body on Wednesday said the
oil price hike would occur "if Iran halts oil exports as a
result of US and European Union sanctions."
The IMF further stated that financial sanctions against
Tehran may be "tantamount to an oil embargo" and would imply
supply declines of about 1.5 million barrels per day from
the world's fifth-largest oil producer.
That volume of supply disruption, according to the IMF,
would be comparable to losses in output from Libya last year
due to civil war in that country which pushed oil prices
over USD100 a barrel.
The IMF had already highlighted the risks of a complete oil
embargo on Iran in a note to deputies from G20 countries who
met in Mexico City last week.
After the US, the European Union (EU) held a summit meeting
on Monday to discuss a proposed embargo on Iran's oil
exports.
At the meeting, the EU Foreign ministers reached an
agreement on sanctioning oil imports from Iran and freezing
the assets of Iran's Central Bank within the EU.
EU foreign policy chief Catherine Ashton told reporters that
the sanctions are aimed at pressuring Iran to return to
talks over its nuclear program.
Iran has always underlined its preparedness to resume talks
with the West, but has meantime stressed that it will never
accept any precondition for such talks.
Economist: Iran Inflation Rate
Doubles
TEHRAN (Mojnews) - The Economist reported that the inflation
rate in the Islamic Republic of Iran doubled during last
year, 2011.
Iran's inflation rate stood at 10.1 percent in 2010, the
Economist reported in its December issue adding that the
index in 2011 doubled reaching 20.2 percent.
According to the report, the inflation rate in Iran will
start a falling in 2012 standing at 17.1 percent.
The index will also fall to 14.7 percent in 2013, to 15.6
percent in 2014 and 16.1 percent in 2015.
In 2016, Iran's inflation rate will stand at 16.3 percent,
according to the Economist.
Why Is Investment Income in US
Taxed Less Than Wages?
WASHINGTON (AP) — Why do Mitt Romney and other wealthy
investors pay lower taxes on the income they make from
investments than they would if they earned their millions
from wages?
Because Congress, through the tax code, has long treated
investment more favorably than labor, seeing it as an engine
for economic growth that benefits everyone.
President Barack Obama and the Occupy Wall Street movement
are challenging that value system, raising volatile
election-year issues of equity, fairness — and Romney's tax
returns.
Romney, who released his 2010 and 2011 tax returns this
week, has been forced to defend the fact that he paid a tax
rate of about 15 percent on an annual income of $21 million.
His tax rate is comparable to the one paid by most
middle-income families. His income, however, is 420 times
higher than the typical U.S. household.
The Republican presidential candidate's taxes were so low
because the vast majority of his income came from
investments. The U.S. has long had a progressive income tax,
in which people who make more money pay taxes at a higher
rate than those who make less. But for almost as long, the
U.S. has taxed capital gains — the profit from selling an
investment — at a lower rate than wages.
"There are two ways to look at: There is a moral argument
and an economic growth argument, and they both point to
lower taxes on capital gains," said William McBride, an
economist at the conservative Tax Foundation.
McBride says it is unfair to tax income more than once, and
capital gains are taxed multiple times. If you got the
original investment from wages, that money was taxed. If the
stock you own gains value because the company you invested
in makes a profit, those profits are taxed through the
corporate tax. And if that company issues dividends, those
are taxed as well.
Lots of people are double taxed, says Chuck Marr, director
of federal tax policy for the liberal Center on Budget and
Policy Priorities. "Check out your last pay stub: There's
income tax and payroll tax, so you're double taxed, too,"
Marr said.
And, he noted, when you buy something, you probably pay a
sales tax.
Under current law, the top tax rate is 15 percent on
qualified dividend and long-term capital gains — the profits
from selling assets that have been held for at least a year.
The top income tax rate on wages is 35 percent, though that
applies only to taxable income above $388,350.
Congress started taxing capital gains at a lower rate than
wages following World War I. The concern then was that high
taxes on capital gains actually reduced revenue because
people would simply hold onto their investments and restrict
the flow of capital, according to the Encyclopedia of
Taxation and Tax Policy.
At the time, however, the top tax rate on wages was a
whopping 73 percent. In 1922, Congress lowered the top
capital gains rate to 12.5 percent, a rate that lasted until
1934.
For much of the next 70 years, the top tax rate on long-term
capital gains hovered between 20 percent and 30 percent,
going as high as 39.9 percent in the 1970s but never falling
below 20 percent until 2003, when Congress passed a gradual
reduction to the current rate.
The 2003 law also started taxing qualified dividends at the
same rate as capital gains.
Liberals and some moderates argue that lower taxes on
investments are a giveaway to the rich because they are the
ones who get the most benefit. Last year, two-thirds of all
capital gains went to people making more than $1 million,
according to the nonpartisan Joint Committee on Taxation,
the official scorekeeper for Congress.
Only 5 percent of capital gains went to people making less
than $100,000, and only 13 percent went to people making
less than $200,000.
"I'm a liberal person and I believe strongly that the
wealthy should pay more than the working poor," Marr said,
regardless of whether the income is from investments or
labor.
Obama has taken up this argument, though his budget
proposals have called for only small tax increases on
capital gains and dividends, to a top rate of 20 percent.
Instead, Obama has developed the "Buffet Rule," named after
billionaire investor Warren Buffet, which says rich people
shouldn't pay taxes at a lower rate than their secretaries.
To impose this rule, Obama said at his State of The Union
address Tuesday that people making more than $1 million
should pay at least 30 percent of their income in taxes.
"Now, you can call this class warfare all you want," Obama
said. "But asking a billionaire to pay at least as much as
his secretary in taxes? Most Americans would call that
common sense."
The proposal has little chance of passing a divided Congress
this year, and the Obama administration has released few
details on how the tax would work.
Conservatives argue that increasing investment taxes would
make it harder to for businesses to raise capital,
restricting job growth and hurting financial markets,
reducing income for people who rely on pension funds and
401(k) accounts as well as billionaires and millionaires.
"In my view the rationale for taxing capital gains and
dividends at a lower rate has nothing to do with what an
individual pays versus another individual," said Jim
McCrery, who was a senior Republican member of the
tax-writing House Ways and Means Committee when the 2003 tax
cuts were enacted. "It has everything to do with the
creation of jobs in this country."
McCrery now works for the Alliance for Savings and
Investment, a coalition of companies and business groups
that want to keep the current tax rates on capital gains and
dividends.
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